Stovall examines seven well-known pieces of Wall Street wisdom: Let your winners ride, but cut your losses short As goes January, so goes the year Sell in May and then go away There’s no free lunch on Wall Street There’s always a bull market someplace Don’t get mad – get even Don’t fight the Fed He quantifies each rule and backtests the underlying idea. Not every idea is intuitively quantifiable. For example, rule number 6 – “Don’t get mad – get even” – looks at the advantages of cap-weighted indexes compared to equally-weighted indexes. Since cap-weighted indexes will favor large cap stocks over small caps, they are actually likely to underperform. This is logical to anyone familiar with the fact that small cap stocks outperform over the long-term. Stovall backs this up with data and then offers a strategy to take advantage of this rule. This book provides detailed test results to support the wisdom of each rule. For

Many novice technicians blindly trade signals generated by their favorite indicator. Eventually, they blow up their account unless they are fortunate enough to meet a more experienced technician who teaches them the valuable lesson that we actually trade price, not our indicators. After reading Northington’s original work, I realized that more than price, technicians pursue and profit from volatility. In this book, he offers insights into the importance of volatility to traders. While profits and losses are measured by the entry and exit price, volatility measures the move that led to the trading opportunities. It is actually volatility which leads to profits, and without volatility, trading isn’t possible for the majority of traders. Flash trading, perhaps soon to be outlawed by regulators, doesn’t require volatility but does require lightning fast computer connections and physical proximity to exchange data. Likewise very short-term arbitrage trading doesn’t require price volatility as much as it

The first chapter of Gunn’s Trading Regime Analysis is titled “There is NO Holy Grail.” This summarizes the trading philosophy he details in this book. While trade selection and entry and exit techniques can be automated to a great extent, ultimately he realizes no single tool will work in all market conditions. For this reason, he explains a dozen standard technical tools in Part II of the book. Some CMT candidates would benefit from a practical review of the basic tools of technical analysis. In this section, they can find clear explanations of many fundamental concepts illustrated with examples suitable for professionals. A key insight of the author is that tools often fail when they are being applied in the wrong trading regime. The term trading regime is used to define whether the market is in a trending or range-trading mode. Volatility is used to assess the regime, and knowing whether

The study of intermarket technical analysis was pioneered by John Murphy, CMT. His 1991 book, Intermarket Technical Analysis: Trading Strategies for the Global Stock, Bond, Commodity, and Currency Markets, was the first to identify tradable relationships between these markets. His work included a number of charts which demonstrated the leading and lagging relationships. Six years later, Murray Ruggiero published Cybernetic Trading Strategies and moved beyond Murphy’s visual approach to intermarket relationships. Ruggiero presented trading systems that profitably exploited the connections between markets. He detailed rules that allowed traders to seek relationships between other markets, and moved the field of study towards the twenty-first century. Finally, after twelve years, Katsanos revisits the idea of intermarket technical analysis and builds on the work of his predecessors. This work is largely based on the ideas of correlation and linear regression. The concepts are thoroughly explained in a comprehensible manner. They are then applied on a

MTA Goes to Mumbai, India – Technically Speaking 2009 The MTA recently visited Mumbai and held its first international seminar, Technically Speaking 2009. On Saturday, August 22, 2009, in conjunction with UTVi, the MTA held a FREE seminar for all MTA members at the Taj President Hotel, in Mumbai. This seminar focused on the current state of global Technical Analysis (TA) and discussed the upcoming establishment of a local TA Indian Association. This event featured Ralph Acampora, CMT and Philip Roth, CMT live in Mumbai, with webcasts from Mark Galasiewski, Jordan Kotick, CMT, Jeffery Lay, CMT, Phil Erlanger, CMT and others from the local Indian market. To view a slideshow of pictures from this event, please click here. Recordings of the presentations will be made available shortly. MTA Educational Web Series Registration is now open for the following upcoming presentations of the FREE MTA Educational Web Series. Sign Up Now – Wednesday, September 9th,